10.6. Collinearity
One important problem in the application of multiple regression analysis involves the possible collinearity of the independent variables. This condition refers to situations in which one or more of the independent variables are highly correlated with each other. In such situations, the different variables do not provide new information, and it is difficult to separate the effect of such variables on the dependent variable. When collinearity exists, the values of the regression coefficients for the correlated variables may fluctuate drastically, depending on which independent variables are included in the model.
One method of measuring collinearity is the variance inflationary factor (VIF) for each independent variable. The ...
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